CME
Description of IEF Programs

Click here to view the Guide to CME Group Collateral Management Programs

IEF2

  • IEF2 began in July, 2001.
  • IEF2 is a direct investment in any of CME’s 20 approved institutional classes of Money Market Mutual Funds.
  • CME has established “CME Shareholder Servicing LLC” to support the processing of payments and orders.
  • There is a 3% CME haircut and a 2% regulatory haircut on IEF2 investments.
  • There is a diversification requirement associated with all investments over $100 million.


Back to Top

IEF3

  • IEF3 is a specialized collateral program that permits CME clearing firms to pledge Reg. 1.25 collateral that CME does not accept directly.
  • CME has partnered with The Bank of New York (BNY) and JP Morgan (JPM) to support IEF3.
  • Clearing firms are debited cash in the morning and substitute CME approved, Reg.1.25 collateral in the afternoon.
  • The collateral is moved into a tri-party account, controlled by CME, at either BNY or JPM.
  • The deal unwinds on the morning of the next business day and begins again.


Back to Top

IEF4

  • IEF4 is also a specialized collateral program that permits CME clearing firms to pledge Reg. 1.25 collateral that CME does not accept directly.
  • CME has partnered with BNY and JPM to support IEF4.
  • IEF4 is a “term” pledge of securities with the “term” defined by the clearing member.
  • Clearing firms transfer securities into a tri-party account, controlled by CME at either JPM or BNY.
  • Substitutions may occur during the business day as long as the “deal” amount is not violated.


Back to Top

IEF5

  • IEF5 began in July, 2004.
  • CME has partnered with JPM and Fifth Third Bank in offering this program. 
  • IEF5 is a bank account that pays a monthly “hard dollar” benefit.
  • The “hard dollar” benefit is based on the Fed Funds effective rate.
  • CME processes all transfers on behalf of the clearing firm.


Back to Top